When Microsoft revealed its latest quarterly results last month, chief executive Satya Nadella used the occasion to announce it had made history by creating a new kind of device.
"We [just] created a new category of two-in-ones where even our OEMs are finding success, which was one of our strategic objectives of doing the Surface," he said, speaking about the rise of the tablet range.
Nadella's paean to the devices was justified. For its Q2, Surface sales were up 29 per cent year on year at $1.3bn (£900m). The range of devices has been so successful that resellers have clamoured to get onto the list of authorised partners and one VAR even labelled the device an "iPad killer". This rise to glory is all the more remarkable given that sales started off slowly and in 2013 Microsoft's effort to clear unwanted stock resulted in a $900m hole in its finances.
The reasons for the Surface's success are varied, but many are pointing to its enterprise-suited design and flexible nature. However, Microsoft's push into the hardware world has seen it endure bumps along the way, and its decision to restrict the number of Surface resellers has been criticised by some.
Ryan Asdourian (pictured below), Microsoft's Windows and Surface lead, attributed the device's success to its combination with Windows 10, which preceded the launch of the Surface Pro 4 and the Surface Book.
He said that businesses are attracted to the range because the products allow them to increase productivity.
"We are meeting customers where they have their greatest needs [by] saving businesses time and making [them] more productive," he said.
"Also, being able to use features such as Windows Hello, switching between a tablet and a PC, using a pen where you work, having the best in security: I think those are some of the main drivers that have really got the enterprise excited."
Paul Tomlinson, managing director of reseller Mirus IT, which became a Distributor Managed Partner (DMP) at the end of last year, said that he has not sold one alternative tablet since his company made the list and that the Surface has been a "really popular" product.
"The way people are working is changing all the time," he said. "People want to be able to work from home, and portability becomes even more important; the Surface allows them to do that. I think it [the Surface] will continue to [have an] impact on traditional desktop and also laptop sales."
With the dramatic success of the Surface, Microsoft has begun to move into a market away from its traditional world of software and Asdourian said that the company has big ambitions in this space.
"To say Microsoft aspires to be a strong player in the hardware business is a true statement," he said. "It's something you have to earn and it's something we have been working very hard to earn. We have traditionally been very strong in software, and this is a way to show how that comes together to make a delightful experience for customers."
But just as any great change brings with it challenges, Microsoft has encountered teething problems with the Surface. After sluggish initial sales, demand quickly picked up but the vendor has not always been able to keep pace and last month resellers were left with very little or no stock of the mid-range and high-end i5 and i7 versions of the Surface Pro 4 - an issue which is still ongoing. Last month CRN's sister site Channelnomics Europe also revealed that Microsoft was recalling AC power cords for the Surface Pro, Surface Pro 2, and Surface Pro 3.
In January, Microsoft was due to launch its collaboration device, the Surface Hub, in the UK, after an initial delay. However, it has been delayed again and Asdourian said he is "hoping to launch that extremely soon".
He would not indicate when the launch would be, but hinted that the hold-up was because of manufacturing problems.
"One of the things that's super important to us with any product is quality," he said. "We are making sure a product like this releases with the highest level of quality when it ends up in customers' hands."
A bite out of Apple?
Despite these blips, perhaps one of the biggest accolades anyone can give Microsoft is that its Surface range has posed a threat to Apple, which for several years has dominated the market with the iPad.
Conor Callanan, chief executive of Core Technology Systems, another DMP, said the Surface's Windows operating system is more secure than the iPad and thus a real challenge to it.
"We see it as a great opportunity and as an iPad killer," he said. "It's a premium product and now we can buy warranty that includes accidental damage; it's a perfect three-year device for senior-level execs."
When asked if the Surface poses a threat to the iPad Pro, Asdourian pointed to the complete nature of the Microsoft device range.
"The iPad Pro is a great product," he said. "But I think what we offer is the ability to run full applications, run a very full suite of security software, run Windows 10; it's all in the Surface and it's the ultimate combination of a tablet and a PC."
All these factors have made the Surface an attractive option for resellers, but not all of Microsoft's partners can get their hands on them. Originally Microsoft appointed only 14 Authorised Device Resellers (ADRs) in early 2015, and then extended this through its authorised distributors Ingram Micro and Tech Data with a batch of 41 appointed in September, 22 on an ad hoc basis and then another 117 last month.
The reason for this restricted number of resellers was due to Microsoft's new entry into the hardware world and because it wanted to do this in a "calculated and thoughtful way", Asdourian said.
He did not rule out another extension of the Surface channel in the UK.
"Let's take a look at demand and let's see how performance is going with all our partners and as we need to, [we will] expand the channel or modify it," he said. "We are looking at delivering the highest-quality channel we can to customers, so we are constantly looking at it."
But the decision to use a limited number of partners has irked some VARs who are missing out. Dave Wilding, account manager at Microsoft partner Shadowfax Technology, said Microsoft has copied Apple's strategy with this move, and it has meant he has had to buy Surfaces at almost retail price from competitors.
"For a lot of resellers - certainly for us - it has left our noses out of joint," Wilding said.
Chris McQuade, operations manager at VAR PCS, said it was "initially frustrating" not to make it onto the first list of ADRs appointed by Microsoft (PCS was later added) but he could appreciate why the vendor decided to limit the channel.
"They needed to do it because it was a completely new market to them where they had no idea about controlling production lines," he said. "Apple has been making PCs and laptops for a long time, so people think the iPad is always smooth and available. But in terms of the maturity of the manufacturing company, Apple has had a lot longer to understand how to do it and Microsoft are new. What Microsoft has done, you can't knock them for it; they have done really well."
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